Facebook took another big step toward creating the largest Internet public stock offering in history Thursday, but now the Menlo Park company is faced with the formidable task of convincing skeptical investors that the 8-year-old social network is worth more than $90 billion.

A decline in net income in the first quarter, an unclear path toward generating advertising revenue on mobile devices, and the company's recent $1 billion purchase of a photo app developer figure to be hot topics in upcoming road show meetings between Facebook executives and big investors.

"Facebook still has a halo, but in our judgment that halo has become smaller after its recent growth deceleration," said Sam Hamadeh, chief executive officer of PrivCo, which tracks private pre-IPO firms.

In a registration filed Thursday with the U.S. Securities and Exchange Commission, Facebook said its initial public offering will have 388 million shares priced from $28 to $35 each. At the high end of that range, Facebook and its current shareholders would net as much as $13.6 billion.

"Facebook will mostly be given the benefit of the doubt ... but they still have a lot to prove," Hamadeh said. "Especially after big IPO investors have been badly burned buying into the IPOs of Zillow, Groupon and Zynga, all of which are trading well below their IPO prices. They don't want to get burned again."

Higher price likely

Despite investor skepticism, the Facebook IPO will surpass the $1.67 billion Google raised in 2004 when it became the biggest Internet IPO in history. And it could give Facebook the fourth-biggest overall IPO in U.S. history, surpassing the $13 billion raised when Deutsche Telekom went public in 1996.

Analysts said the modest $28 to $35 range sets the stage for Facebook to price the stock even higher to take advantage of the anticipated demand. The final IPO pricing is expected on May 17, with the company debuting the next morning on the Nasdaq stock market under the ticker symbol "FB."

"Pricing is a bit light, I think because the underwriters want to see the stock pop on the open," said Michael Pachter, managing director of equity research for Wedbush Securities.

Hamadeh said Facebook's $70.4 billion to $88 billion valuation range will change because the "ultimate target valuation" is $95 billion to $100.5 billion. He expects Facebook to set the final IPO price at $38 to $40 per share. By including shares that underwriters have an option to purchase if demand exceeds supply, he said "the total offering size would exceed $15 billion."

Facebook's sheer size and influence has made it the most anticipated IPO in years. It has more than 901 million members worldwide who post 3.2 billion comments and upload 300 million photos each day.

CEO to maintain control

The company reported revenue of $1.06 billion for the first quarter of this year, up 45 percent from the same period a year ago. But net profit dropped to $205 million, a 32 percent decrease from the previous first quarter.

Chief Executive Officer Mark Zuckerberg, who co-founded the company out of his Harvard dormitory, plans to sell 30.2 million shares and in the process raise $1 billion for tax purposes. But with the shares he will retain, Zuckerberg will maintain a controlling 57.3 percent of the voting power.

The regulatory filing, made before the markets closed, signals that Facebook executives are ready to go out on their IPO road show with investors as early as Monday. In fact, Facebook posted a video version of the road show online Thursday afternoon.

But investors may grill Zuckerberg and other executives to show why they should bet on Facebook's future ability to expand advertising revenues, particularly because it doesn't yet have a proven ad strategy for the fastest-growing segment of its users - those who use mobile devices.

'A lot of heated discussion'

Facebook's actual financial numbers show the company should be valued around $60 billion, said GreenCrest Capital's Max Wolff. As a result, investors may want to know how Facebook can pull off the kind of growth that other Internet companies, including Myspace and Friendster, could not accomplish, he said.

With the stock market being less bullish and more risk-averse of late, "my guess is there will be a lot of heated discussion about the valuation," Wolff said.

Given the control Zuckerberg will maintain after the IPO, investors may question Facebook's recent $1 billion acquisition of San Francisco photo sharing app developer Instagram, a deal the 27-year-old CEO engineered personally, reportedly to the surprise of his own board.

"That made it look like he was a kid in a candy store who wanted to have anything he wanted," said Francis Gaskins, president and editor of the research firm IPO Desktop. "They're moving into a different arena, and I don't think they fully realize the subtleties in terms of how to deal with institutional investors and how to run a company on a very cost-effective basis. He talks about connecting people, but he's just not connecting with the people who are going to be setting the value of his company."

Zuckerberg's take

Mark Zuckerberg's status as one of the world's richest men will be further cemented by Facebook's initial public offering. The company's offering - which could raise as much as $13.6 billion from selling stock as high as $35 per share - would peg Zuckerberg's stake at around $17.6 billion. That would make the social network's 27-year-old co-founder wealthier than Microsoft's Steve Ballmer and Russian steel billionaire Vladimir Lisin, both twice his age. Forbes magazine ranks Zuckerberg's fortune as the 35th largest in the world.

Source: Bloomberg Billionaires Index

Road to IPO: milestones in Facebook's history

Facebook - the timeline

Some key developments in the eight years since Facebook's creation:

February 2004: Mark Zuckerberg starts Facebook as a sophomore at Harvard University.

March 2004: Facebook begins expansion to other colleges and universities.

June 2004: Facebook moves to Palo Alto.

September 2004: Facebook introduces the Wall, which allows people to write personal musings and other tidbits on profile pages. Lawsuit filed against Facebook says Zuckerberg stole the idea for Facebook from a company co-founded by twins Cameron and Tyler Winklevoss and a third person at Harvard.

September 2005: Facebook expands to include high schools.

May 2006: Facebook introduces work networks.

September 2006: Facebook begins letting anyone older than 13 join. It also introduces News Feed, which collects friends' Wall posts in one place.

May 2007: Facebook starts Platform, a system for letting outside programmers develop tools for sharing photos, taking quizzes and playing games. The system allows companies such as game maker Zynga to thrive.

October 2007: Facebook agrees to sell a 1.6 percent stake to Microsoft for $240 million.

November 2007: Facebook introduces its Beacon program, a feature that broadcasts people's activities on dozens of outside sites. It leads to a privacy backlash before Facebook scraps it as part of a legal settlement.